Sri Lanka’s high end commercial property to narrow the gap with demand: RIU

Mar 29, 2017 (LBO) - Sri Lanka's Research Intelligence Unit (RIU), a real-estate advisory firm, says Grade A commercial property developments over the next several years will see supply narrow the gap with demand, which will continue to grow in correlation with economic growth. The Grade A contribution to the cumulative stock is still estimated at around 53 percent due to the much larger scale of these buildings. The island's commercial property market in the next three years will see further significant additions to the inventory at the top end of the market with Colombo City Centre, Shangri-La and Water front making contributions, RIU said, releasing its commercial property market report for the first quarter of 2017. These mixed development projects will be positioned as commercial destinations which offer premier, state of the art A Grade office spaces integrated with residential, retail and luxury hotels. “With occupancy levels at the top commercial developments maintaining close to 100 percent over several years now, we can observe that there is still un-met demand for high-end commercial space in Colombo,” Roshan Madawela, chief executive officer of the Research Intelligence Unit said. “Over the next several years, we expect supply to narrow the gap with demand which will continue to grow in correlation with economic growth.” Whilst there are no formal classification systems for commercial office space, several factors can be identified to determine high-end or Grade A office real estate. These factors include the age of the building, location, standard of maintenance, prestige related factors and the availability of parking. In addition, these buildings will have high-quality furnishings, state-of-the-art facilities and excellent accessibility. This high-end segment of the market is often targeted towards the international market, demanding rents that are well above prevailing averages. In the Sri Lankan context, WTC, HNB Towers, Access and PARKLAND are considered as meeting the mark in all respects of Grade A commercial property. The latter, as the latest development on the market, is the subject of a detailed case study in the RIU report. Parkland by RIL property is the latest Grade A office space supplier to start operations in Colombo is a real estate company founded in 2009, as an owner, developer and manager of Grade ‘A’ commercial office space in Colombo. RIL are the first to initiate facilities management services and are revolutionary and unique in their approach to commercial space. As a new entrant, RIL is equipped with competent and skilled in-house teams who render quality property management services to their clients. The company endeavors to take full responsibility for the maintenance of Grade A office spaces with micro-management of daily operations in order for their clients to focus on their core businesses.
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In their latest report the Research Intelligence Unit says in the present context, there is considerable bargaining power existing with owners/managers of grade A office realtors vis-à-vis multinational companies and address conscious domestic corporates reflecting inelastic demand. “It is also important to note that at present owners/managers of premium institutional grade office space in the CBD core markets including postcodes like Colombo 00100, 00200 and 00300 are able to increase rents by 10.to 15 per cent bi-annually,” the report added. Information on the reports are available from info@riunit.com.